In a dynamic day for global markets, Italy's Debt Agency, Tesoro, successfully sold €2.5 billion in inflation-linked bonds (BTPei) for both 2029 and 2035, surpassing their initial target range of €2.0-2.5 billion. Meanwhile, the Central Bank of Sri Lanka (CBSL) is anticipated to maintain its Overnight Policy Rate (OPR) at 8.00% in its upcoming interest rate decision. Economic indicators and financial data releases are poised to impact various markets, with significant attention on currency fluctuations, particularly in the GBP/USD pair, which dipped below 1.2450 on Tuesday.
The European stock market showed signs of resilience as the STOXX 600 index edged up slightly. SAP maintained its position, trading flat after raising its profit guidance. In contrast, the DAX index witnessed notable upward movement, driven by Sartorius's impressive earnings report that led to a 10% surge, and Merck's 4% gain ahead of its results.
On the currency front, the USD/CHF pair traded at 0.9064, while the EUR/USD pair remained under pressure, trading below 1.0450 due to strong US Dollar demand. This trend aligns with expectations for the European Central Bank (ECB) to cut interest rates by 25 basis points on Thursday, signaling dovish inclinations.
In Australia, the December Consumer Price Index (CPI) year-over-year data was released at 19:30 local time, showing a value of 2.5%, slightly up from the previous 2.3%. Additionally, Australia's December NAB Business Confidence data improved marginally to -2 from a prior value of -3.
Spain's fourth-quarter unemployment rate was reported at 10.6%, better than the estimated 11.1%, signaling a positive trend in the labor market. Meanwhile, Hungary's Debt Agency (AKK) is set to sell three-month bills at 05:30 local time as part of its regular funding operations.
In the US, several key economic data releases are on the agenda. The Weekly Redbook Like-for-Like (LFL) Sales data is scheduled for release at 08:55 US time, followed by the January Dallas Fed Services Activity data at 10:30 US time. The Treasury will also conduct a sale of seven-year notes at 13:00 US time.
The GBP/USD pair struggled throughout the day, slipping below 1.2450 as market participants reacted to ongoing economic developments and currency market dynamics.